“We have been tracking commercial property and casualty rates since 2001. Generally, soft or hard market cycles last at least three years. We expect more moderate rate reductions for the coming year for all but a few lines of business. If interest rates increase, rate reductions could accelerate,” explains Richard Kerr, Chief Executive Officer (CEO) of MarketScout.

The soft market environment is now 16 months old, explains MarketScout, dipping into negative territory during the latter half of 2015, suggesting that rates across the U.S. commercial P&C sector could remain under pressure for some time.

Furthermore, the reduced profitability of global reinsurers continues to push capacity into primary lines as players look to increase participation in less competitive, and potentially more profitable lines of business, which is likely adding even more pressure on rates in the commercial P&C space.

By account size, MarketScout reveals that there were no changes in December from the previous month. Small (up to $25,000) sized accounts remained flat in December, while medium ($25,001 – $250,000) sized accounts, large ($250,001 – $1 million) sized accounts, and jumbo (over $1 million) sized accounts were down by 1%, 2% and 2%, respectively.

MarketScout also provides a monthly breakdown of rate movements by coverage class and, reveals that in December business interruption, fiduciary, and crime were flat.

BOP, professional liability, and D&O liability were all up by 1% during the month, and EPLI and crime increased by 2%. The most dramatic increase came was seen in commercial auto, which increased by 3% during December.

Inland marine and umbrella/excess declined by 1% in December, and workers’ compensation, general liability, and commercial property all declined by 2% in December.

Moving away from the commercial side, MarketScout also provides a breakdown of composite rate movements for personal lines, which shows that overall rates in December were up by 2%.

Homeowners’ rates for homes valued below $1 million increased by an average of 3% in December, while homeowners’ rates for homes valued below $1 million were up by 2%.

Both automobile and personal articles’ lines increased by 2% during December.

“We have been tracking personal lines rates since 2012. Since then insurers have been steadily increasing rates with the exception of the erratic rate direction over the last fourteen months. Generally, personal lines insurers do not adjust pricing as aggressively as their commercial brethren,” said Kerr.